Friday, 17 March 2017

Plumbers, pilots and parcel couriers: self-employment in the gig economy


Chancellor Philip Hammond’s first budget may have targeted the so-called gig economy with higher National Insurance contributions (before hastily withdrawing them a week later), but the nature of self-employment could be under the legal microscope for some time to come.

It seems that zero hours contracts and the gig economy just can’t stay out of the headlines, these days. Already this month, analysis of data from the Office for National Statistics has revealed that the number of Britons on zero-hours contracts neared 1 million last year, and more than one courier firm was found to be charging drivers who missed a shift.

A much-publicised Court of Appeal decision in February marked another skirmish in the continuing battle over workers’ rights and, specifically, the circumstances in which individuals engaged by a (third party) company to provide services can be considered self-employed.

That judgment followed a tribunal decision last year, which ruled that two Uber drivers were not self-employed, as the global taxi technology giant had claimed, but qualified as ‘workers’ and were therefore entitled to certain workers’ rights, under UK law. Uber has since appealed that decision.


The February case, Pimlico Plumbers v Gary Smith, dated back to 2011 when Mr Smith was dismissed a few months after suffering a heart attack. It took less than a year for him to get a decision from the original Employment Tribunal, but took almost another five for an Employment Appeal Tribunal in 2014 and then the Court of Appeal to uphold that original decision in his favour.

The dispute was just one of many revolving around the issue of self-employment and whether many in the so-called gig economy should really be considered “workers”” and thus be entitled to benefits such as rest breaks, holiday and sick pay and the minimum wage.

It is estimated that up to 5 million people in the UK, from delivery drivers to video producers, are paid for their work in this way. While many appreciate the flexibility that self-employment offers, such arrangements can, like zero hours contracts, be used to exploit staff and avoid employment obligations such as the minimum wage.

Questions about such arrangements are nothing new. Back in 2010, it was drivers for the delivery firm Hermes whose employment status hit the headlines. In 2013, contracts between Ryanair and pilots working for the airline came under scrutiny. The somewhat fluid definitions of "worker" and "employee" have been taxing employers, employment lawyers and journalists for at least a decade.

The 16,000-word judgment in the Pimlico Plumbers case makes for a long read, but one early line from Master of the Rolls Sir Terence Etherton, stands out:

“The case puts a spotlight on a business model under which operatives are intended to appear… as working for the business, but at the same time the business itself seeks to maintain... a legal relationship of client or customer and independent contractor rather than employer and employee or worker.”

Obviously, the Court was well aware that the issues in the case represent a wider phenomenon in the modern workplace and, while this particular decision might not be appealed, it won’t be long before other courts and tribunals will be asked to consider similar issues.

The legal tests of whether a person is truly self-employed are complex and still far from definitive, but any organisation that depends upon such working arrangements could start by considering whether or not they genuinely offer flexibility and benefit to the person doing the work or solely benefit the business.

Flexible ATE Solutions for the challenges ahead

Our industry is currently facing many challenges, from changing legislation, greater financial pressure on firms and increased competition for less work; lack of support from your ATE provider shouldn't be one of them.

With the timetable and framework for change now announced https://www.lawgazette.co.uk/news-focus/pi-small-comfort-on-small-claims/5059994.article it is important that as well as fighting the changes you protect your clients and your firm from any adverse effects.

We offer flexible solutions for your practice, depending on what risk strategy you decide is suitable for you. We are able to offer a choice of:
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  • Full cover for adverse costs and disbursements
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We continue to innovate and are certain that whatever the changes ahead, we will have the ATE solutions, not just for today but also for tomorrow.

Call us at 0117 307 2293 or email us to discuss how we can help future proof your firm.

Thursday, 9 March 2017

Our new charity of the year - FOCUS

We’re really excited to announce that ARAG’s new charity of the year for 2017  is FOCUS, the charity for Cheltenham and Gloucester Hospitals that raises funds for the Gloucestershire Oncology Centre.


We’ve already kicked off our fundraising efforts this week with a charity ‘Bake Off’, which turned up some highly- skilled (and competitive!) amateur bakers in the ARAG ranks.


FOCUS is the Fund for Oncology Centre Users and Supporters, and the charity provides vital support to people being treated for cancer in Gloucestershire Hospitals, as well as purchasing important equipment for patients’ treatment.



We all know that our lives will be affected by a cancer diagnosis at some stage, whether it is a friend or family member, and while treatments are getting so much more effective and successful, they can also be more complex and expensive.



FOCUS helps people living with cancer in Gloucestershire and surrounding counties by funding everything from sophisticated clinical equipment to furniture and devices to make them more comfortable during treatment.



The charity came to our attention because one of our colleagues has benefited from its work, while undergoing treatment for kidney cancer. Our own charity committee, ACT (ARAG Charity Team) is hard at work planning events and fundraising activities, so that we can top the total raised for the Ronald McDonald House, Bristol, in 2016.



FOCUS is part of the Gloucestershire Hospitals NHS Foundation Trust General Charitable Fund (Charity number: 1051606). If you would like to know more about its work, you can find more information here.


Friday, 3 March 2017

How Mediation Could Help Resolve Your Legal Claim


Rob McArthur, our Claims Controller, explains the benefits of resolving legal disputes through mediation. He also discusses the potential downside of not considering it, if it’s offered in a legal dispute.
 
If you would like more information about our Claims department or you need a claims form please click here

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Denouncing the discount rate reform shows lack of compassion


The contrasts between two recent pieces of government intervention that will impact the insurance industry could hardly be starker.


First, the Ministry of Justice announced its plans for the claims process, which include small, fixed awards for ‘whiplash’ injuries and increasing the Small Claims Court limit to £5,000 for motor accident claims. Then, within days, the Lord Chancellor, Liz Truss, dropped the apparent bombshell that the discount rate applied to serious injury claims would be reduced, from 2.5% to minus 0.75%.



The first reform, which will severely limit access to justice for many quite genuinely injured motorists, have major consequences for the courts and parts of the legal profession, while probably failing to hit its questionable target of claims fraud, was buried under the bigger news of the extensive Prison and Courts Bill.

The second, a long overdue adjustment to the way in which compensation payments to the most seriously injured victims of motoring, medical and other negligence are calculated, largely at the expense of insurers and the NHSLA, was met with the level of response usually reserved for major natural disasters.



The railroad timetable

One would be forgiven for thinking that the change to the “discount rate” applied to large personal injury awards, came entirely out of the blue. While the extent of the swing may have surprised many, the original MoJ consultation on the inadequacy of the existing formula, unchanged in over 16 years, closed in the summer of 2012.

The Lord Chancellor has only been compelled to change it now under threat of judicial review, overcoming legal action by the ABI attempting to delay her announcement.

Contrast this with the timetable for the Whiplash reforms which, while the subject of intense lobbying for some years, must have broken records for the speed with which they covered the ground between consultation and the MoJ’s decision.

Launched in mid-November, the Reforming the Soft Tissue Injury (Whiplash) Claims Process consultation was widely criticised for being open for just six weeks and closing immediately after the Christmas break.

It was almost as if the MoJ didn’t want too much rigorously gathered evidence and carefully considered expert opinion to ignore.

In the following six weeks, the MoJ managed to digest all of the responses, consider options and announce its plans, in spite of warnings from senior judges and a mauling in the Justice Select Committee at which it was accused, by the Committee’s chair, Conservative MP Bob Neill, of “firing in entirely the wrong direction”.



Winning the media war

The difference between the media coverage of the two reforms has also been stark. Barely mentioned outside the insurance and legal trade press, the whiplash reforms made just one, 11-word sentence (paragraph 19) in the BBC’s online story about the Prison and Courts Bill.
So much for making fundamental changes to citizens’ common law rights.


The “crazy” discount rate adjustment, prompted a succession of articles across the mainstream media, largely towing the ABI top line that premiums would have to go up, as representatives of various insurers descended on the Treasury to lobby the Chancellor, Philip Hammond to have the decision reversed.

For all the wailing about premium hikes that they say insurers will be forced to pass on to motorists, it would be easy to forget that the victims of motor accidents, whether their injuries last a few months or the rest of their lives, are often their customers too.

Those who will hopefully benefit from the discount rate reform are among the most vulnerable in our society. Children injured at birth and motorists left paralysed after an accident may now have the money to fund their care adequately, as they age.

The clamour to denounce this as “crazy” looks neither compassionate nor compatible with the social responsibilities that most modern businesses claim to uphold.